Correlation Between Maple Leaf and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Profound Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Maple Leaf and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Foods and Profound Medical Corp, you can compare the effects of market volatilities on Maple Leaf and Profound Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Maple Leaf with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Profound Medical.
Diversification Opportunities for Maple Leaf and Profound Medical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maple and Profound is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Profound Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profound Medical Corp and Maple Leaf is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Maple Leaf Foods are associated (or correlated) with Profound Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profound Medical Corp has no effect on the direction of Maple Leaf i.e., Maple Leaf and Profound Medical go up and down completely randomly.
Pair Corralation between Maple Leaf and Profound Medical
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.57 times more return on investment than Profound Medical. However, Maple Leaf Foods is 1.76 times less risky than Profound Medical. It trades about -0.03 of its potential returns per unit of risk. Profound Medical Corp is currently generating about -0.06 per unit of risk. If you would invest 2,404 in Maple Leaf Foods on November 8, 2024 and sell it today you would lose (237.00) from holding Maple Leaf Foods or give up 9.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Profound Medical Corp
Performance |
| Timeline |
| Maple Leaf Foods |
| Profound Medical Corp |
Maple Leaf and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Profound Medical
The main advantage of trading using opposite Maple Leaf and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Profound Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Profound Medical will offset losses from the drop in Profound Medical's long position.| Maple Leaf vs. Saputo Inc | Maple Leaf vs. George Weston Limited | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings |
| Profound Medical vs. HLS Therapeutics | Profound Medical vs. Medicenna Therapeutics Corp | Profound Medical vs. Aptose Biosciences |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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